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1

Stay Away From the Mall 

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The first wave of specialty retailers will post their quarterly results next week. Because most retail chains end their fiscal year in January, we will be looking at the quarters that ended last month in most cases. It won't be pretty, if the dark results from Hot Topic are any indication.

Consumer confidence may have shown signs of life lately, but it probably won't be enough to save the day. Analysts believe that most of the mall chains will report lower earnings than they did a year ago. You find a break in the bad news in Wal-Mart Stores (NYSE: WMT  ) , and even then it's not exactly a growth pinata. For the country's largest retailer, Wall Street sees flat earnings growth.

Let's take a look at who is reporting next week.

 

Projected Earnings

Year-Ago Earnings

Liz Claiborne (NYSE: LIZ  )

($0.23)

$0.28

Macy's (NYSE: M  )

($0.26)

$0.02

Kohl's (NYSE: KSS  )

$0.38

$0.49

Nordstrom (NYSE: JWN  )

$0.23

$0.54

J.C. Penney (NYSE: JCP  )

$0.02

$0.54

Abercrombie & Fitch (NYSE: ANF  )

($0.12)

$0.69

Source: Yahoo! Finance.

I told you it wouldn't be pretty. These are companies that obviously shine over the holidays, so investors usually don't expect much earlier in the year. Still, it has to sting to see a mall anchor like Macy's and staples like Abercrombie & Fitch and Liz Claiborne pegged to swing from last year's profits to outright losses.

Investors will be braced for the results. They have seen the malaise in the bleak monthly same-store sales that many of these chains have put out. The real meat in the metrics will be if the chains had to sacrifice margins to move dated inventory and how they see business shaping up for the current quarter.

The retail future should be rosier than the past. The federal tax credit kicked in last month, marginally boosting many paychecks around the country. It may not seem like much, but it could be the motivational push to get the malls moving again.

Don't take it from me, though. Make sure you hear it from the retailers next week. If not, just do what most shoppers have been doing: Go window shopping, but put your money to work elsewhere.

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Longtime Fool contributor Rick Munarriz prefers to hang out at the food court, collecting the free toothpick-skewered food samples. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 08, 2009, at 10:04 PM, madmilker wrote:

    People in America need to realize jus what got America in this shape…”cheap” yes so-call cheap items from a foreign land.

    quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!

    Now! if there be 182 country’s making items for the world to buy and they have only 5% of the pie in China…duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there…. but with the “yuan” going up in value and the US dollar going down…all the foreign items that the American consumer buys thinking it is cheap has went up in price.

    People…its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the “we the people” have to turn to the “second” largest employer in America(Uncle Sam) to sell “we the people” debt in order to get all them dollars back!

    50 years ago a foreigner would had given their left nut for a US dollar or a Hershey’s chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think “MADE IN AMERICA.”

    quote*"Considering that there are over 30,000 ships at sea this morning," writes James Carlton, director of the Williams College-Mystic Seaport Maritime Studies Program, in an e-mail, "the total number of organisms and species in this global 'bioflow' on the morning your readers read your piece could be staggering - billions of individuals, and thousands of species."

    Indeed, scientists have long considered ballast water the primary way invasive aquatic organisms are introduced. From the zebra mussel's arrival in the Great Lakes, to an American jellyfish severely disrupting Black Sea fisheries, the potential costs of accidental introduction of a species to new homes can be tremendous. Aquatic invasives cost the US $9 billion yearly, according to estimates by David Pimentel, professor emeritus of ecology and evolutionary biology at Cornell University in Ithaca, N.Y. Zebra and quagga mussels (a cousin to the zebra) alone cost the $1 billion annually.*end quote!

    tat is $9 billion a year in hidden taxes to all Americans...

    cheap ain't chic and it cost America............jobs!

  • Report this Comment On May 08, 2009, at 10:30 PM, automaticaev wrote:

    these companies always go out of buisness not just now. Buisnesses like this have been going out of buisness as long as i can remember always changing.

  • Report this Comment On May 11, 2009, at 4:00 PM, Ironbob wrote:

    I bought a hatchet this week. It was made in the USA. That felt good even though the sheath was assembled in Haiti!

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Related Tickers

2/13/2012 4:02 PM
LIZ $9.69 Down -0.06 -0.62%
Liz Claiborne, Inc… CAPS Rating: *
M $35.80 Up +0.12 +0.34%
Macy's, Inc. CAPS Rating: **
WMT $61.79 Down -0.11 -0.18%
Wal-Mart Stores CAPS Rating: ****
KSS $50.31 Up +0.43 +0.86%
Kohl's Corp CAPS Rating: **
ANF $44.67 Down -0.40 -0.89%
Abercrombie & Fitc… CAPS Rating: *
JCP $42.00 Down -0.44 -1.04%
J.C. Penney Compan… CAPS Rating: *
JWN $50.56 Down -0.22 -0.43%
Nordstrom, Inc. CAPS Rating: **

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